Michelle Lujan Grisham says tax incentives could be game changer

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FARMINGTON — Recent state legislation that enhances incentives offered to filmmakers shooting projects outside the Santa Fe-Albuquerque corridor has the potential to make a major positive impact in San Juan County, Gov. Michelle Lujan Grisham said during a visit here July 11.

"I do, I do," Lujan Grisham said in an interview with The Daily Times when asked if she thought the change could serve as a game changer for the industry's growth in the county and elsewhere. "And we're hearing that from the film industry."

Lujan Grisham sounded bullish about the future of the film business across the state, noting that hardly a week goes by when her office isn't announcing the addition of "tens or even hundreds of jobs" in New Mexico related to the industry.

"When was the last time that happened?" she asked.

The most recent good news came in the middle of June, when NBCUniversal announced plans to build a state-of-the-art film and TV studio in Albuquerque. For many years, that city and Santa Fe have been luring an increasing amount of film and TV production activity, thanks to the state tax incentives program offered to producers.

But for the most part, that largesse hasn't been extended to outlying communities in the state. The adoption of Senate Bill 2 by the state Legislature in the spring, combined with Lujan Grisham's signature on the measure, aims to change that.

New Mexico's incentives package already was considered one of the more generous of such offerings in the nation. SB2 should make the state even more attractive to filmmakers. It more than doubles the annual cap on rebate payments to qualified film and television productions, and authorizes an additional tax incentive for productions in rural areas of the state.

Lujan Grisham cited the benefits of the measure in a breakfast appearance before the Rotary Club of Farmington on July 11.

"What happened? Well you know what happened," she said, referring to the aftermath of the bill's passage when the crew and cast of the film "Jumanji 2" spent several days in the Farmington area in May shooting footage for the film and NBCUniversal officials announced the deal to build their new studio in Albuquerque.

San Juan County commissioners are moving to position the county to reap the maximum benefits from the new law. They sought, and received, $1 million in capital outlay funds from the state for a film production facility as part of an effort to attract filmmakers and diversify the local economy.

During her Rotary appearance, the governor noted that San Juan County is receiving $30 million in capital outlay funds for projects that range from roads and community centers to economic development and water enterprises. Those projects won't just benefit the local residents who use them, she said.

"If you build that infrastructure, you now have a hook to those businesses to come here," she said. "And I met some of those burgeoning film folks yesterday, and these are young, dynamic individuals who will grow economies and opportunities."

A location for the county's studio has not been chosen, but that move is one of a handful of undertakings industry supporters have mounted locally to draw more film production activity. The inaugural Four Corners Film Festival — an event expected to draw hundreds of film-industry types from around the country — will be held in downtown Farmington Sept. 10-15, and the county also is considering purchasing land for and building a backlot featuring a permanent set that filmmakers could use for their projects.

Lujan Grisham told The Daily Times she was fairly well versed in the film industry's impact on the state during her campaign for governor last year, but she acknowledged she has learned a lot more about it in the six months she's been in office. The industry is regarded as one of the state's better bets for diversifying its economy and tax base, and she said the energy sector — which has shouldered a big part of that burden in recent years — has supported that shift enthusiastically.

But she said an early draft of the recently adopted legislation included some potential pitfalls that failed to protect the state adequately in the event the measure did not generate the anticipated return on investment. Lujan Grisham said she was surprised to see concerns raised by members of both parties that the state could have been taken advantage of in that situation, and she credited lawmakers for resolving those issues and coming up with a measure that addressed that exposure.

More: 'It's a rad little town': Jack Black and 'Jumanji' co-stars film in Farmington

She said another problem arose from the fact that the state's economic development, and tax and revenue departments had not been keeping good information on how well the program was working.

"I have to tell you, that was a shocking revelation," she said. "I'm embarrassed to tell you your state government was not keeping reliable records."

That shortcoming has been addressed, Lujan Grisham said, and she is hopeful that any lingering legislative resistance to the tax incentives package for filmmakers has been sharply reduced by that move.

"They're not wrong," she said of lawmakers who had balked at approving new incentives without being provided with good information about what the state's tax liability would be.

Lujan Grisham hinted that more good news for the film industry in New Mexico is yet to come, explaining that she hopes to be able to announce another major investment in the state soon.

She also indicated she might be open to the idea of increasing the tax incentive for projects shot outside the state's population center if need be, though she hastened to add, "That's not to say we're going to throw money at this problem."

Mike Easterling can be reached at 505-564-4610.

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